I urge our elected federal representatives to oppose the reauthorization of the Export-Import Bank. (The Ex-Im Bank provides taxpayer guarantees to U.S. companies that export and sell products to international customers. Authorization is set to expire on 9/30.) This has been and continues to be a quintessential example of crony capitalism. If a U.S. exporter has customers who find it difficult to find financing, the seller can always guarantee a loan and get a security position to get the asset back in a worst case. If they still cannot get financing, the seller could provide direct financing. In any case, our government should not guarantee such loan private companies.
I’m sure that small and large Iowa export companies are heavily lobbying for reauthorize the Bank. I hope our representatives resist the pressure and vote against this bad policy where taxpayers are asked to take the risk and private companies reap the profits.
In a letter to the Des Moines Register today, 6/24/2015, Jacob Hession advocated for American energy independence and for the renewable energy Production Tax Credit.
We need to be energy independent just like we need to be food independent, clothing independent, pharmaceutical independent, electronics independent… – that is, we don’t need to be independent.
World-wide free market capitalism is a wonderful thing. It gives us a more varied and consistent supply of pretty much everything we need or want. If there is a shortage of anything anywhere around the world, there are people in other parts of the world who will rush to supply what is needed. Shortages mostly occur where trade is restricted and protected.
Any call for for a certain type of “independence” or “security” is usually cover for special interests who will benefit if we protect them from competition or give them special benefits.
What we really need to do is end special protections and subsidies for all forms of energy. Free market capitalism has done more to provide for the security and dependability of the supply all types of products than any scheme devised by government.
LInk to Register article: http://www.desmoinesregister.com/story/opinion/readers/2015/06/24/renewable-energy-hession/29196411/
The Register, in a recent editorial, advocated for letting people order their medications from other countries. A bill introduced into Congress by Senator John McCain would allow people to legally buy their prescriptions from properly licensed Canadian pharmacies. A better idea would be to allow U.S. prescription drug wholesalers and retail pharmacies to buy from Canadian manufacturers and wholesalers. To only allow individuals to buy from Canadian pharmacies would be to pull the rug out from underneath U.S. pharmacies. It would be simply unfair to allow individuals to purchase from Canadian pharmacies but not allow U.S. pharmacies to do the same. The best answer is to allow free trade in prescription drugs at all levels.
Link to Register article: http://www.desmoinesregister.com/story/opinion/editorials/2015/03/08/editorial-easy-way-lower-cost-medications/24629749/
In the Register today, 1/30/2015, Daryl Bouwkamp, with the Vermeer Corp., advocated that the Export-Import Bank (Ex-Im Bank) be reauthorized by Congress to help exporters, such as Vermeer Corp. He wrote, “Vermeer currently serves customers in more than 60 nations – some of whom could we could not reach without financing support from the Ex-Im Bank.” I don’t understand why couldn’t Vermeer provide the financing or the guarantees needed? Are there no banks that would loan money to Vermeer or its customers if Vermeer guaranteed that the loans will be paid back? If not, why should taxpayers be on the hook?
This is a chance for Republicans to show whether or not they really mean what they say when they talk about ending crony capitalism. It appears that the exporters and bankers that use the Ex-Im Bank have become dependent on the taxpayer guarantees. We need to get back to true free market capitalism, where both the risks as well as the rewards are are kept in the private sector. If Republicans allow the Ex-Im Bank to be reauthorized, it will send a clear signal that crony capitalism is alive and well in America.
President Obama should be commended for opening up diplomatic relations with Cuba. It is clear that the 50 year old policy of embargo and isolation has not worked to end the communist dictatorship. Yes, Raul Castro will try to use this change in U.S. policy to his advantage. If only for practical reasons, the embargo should end and relations should be normalized. As President Obama paraphrased, “The definition of insanity is doing the same thing over and over again and expecting different results.” We need to do something different.
There are also important philosophical reasons why relations with Cuba should be normalized: people who act honestly and peacefully should not be prevented in their actions by the force of government. Voluntary free trade, including tourism, is the best way to foster good will and build better friendships. Allowing Cubans to interact more and more with U.S. citizens will ultimately change the opinions of the masses of Cubans. Hopefully, it will lead to a peaceful overthrow of the dictatorial regime similar to that of the U.S.S.R. and of East Germany.
The essay in The Register on 9/15/2014, by Mary Andringa and Jay Timmons in support of reauthorizing the Export-Import Bank (Ex-Im Bank) was well done. The fact that the Ex-Im Bank returned $1 billion in profits to the U.S. Treasury is very persuasive. Of course the same thing could be said about the U.S. government getting into about any business. If our government ran a grocery store or a tractor manufacturing plant, it is very likely that it could make a profit. But we don’t (or shouldn’t) do things that way in the United States.
In this case, there is good reason to believe that privately owned banks could provide this kind of financing for our manufacturers who want to export their products to other parts of the world. The manufacturers should be willing to guarantee the debt of their customers if that is what is needed to secure financing for their buyers. The fact that Ex-Im Bank financing, “is available to any exporter of any size” does not mean that this isn’t an example of crony capitalism. In this case, the crony capitalists just happen to be a very large group of manufacturers who want the government to guarantee loans for their foreign customers.
We have created a crutch for these businesses. We need to take away that crutch and move towards free market capitalism.
Link to Register article: http://www.desmoinesregister.com/story/opinion/columnists/iowa-view/2014/09/15/iowa-view-export-import-bank-economic-engine/15650761/
The letter to the editor in the Des Moines Register on July 4, 2012 by Mark Cooper, president of the South Central Iowa AFL-CIO, makes clear that he refuses to recognize the laws of economics and want government to tip the balance in his favor. He bemoaned, “The closure of more than 50,000 manufacturing facilities, the loss of nearly 6 million manufacturing jobs, and chronic trade deficits are all signs of our diminished industrial and innovative capability.” In fact, over the past 30 years manufacturing output has more than doubled after adjusting for inflation. U.S. manufacturers are very innovative and have increased capability. Innovation and improvements in technology have allowed higher output with fewer jobs – especially fewer unskilled jobs. It used to be that an honest, hard working person with few skills could get a job in a factory that paid well. Over time, machines have been developed to do the strenuous, repetitive and dangerous tasks. It is specifically innovation, not international trade and low wages in foreign countries, that has caused most of the job losses in manufacturing.
International free trade does put downward pressure on wages, but it also has the benefit or lowering the prices we pay for many products and services. There have been real losses in jobs and manufacturing since the recession started in 2008, but the recession was caused by a government abetted speculative bubble in the housing market, not international trade. Minimum wage laws price out of the market those with the least skills, and at the same time tends to keep prices high when they otherwise might fall. What exactly would be wrong if wages fell 25% but prices fell by 50%. Unfortunately, our government has a vested interest in making sure that we have inflation in our economy. They are working very hard to push up the prices of houses, which probably has the biggest negative effect on relative poor people who don’t have a home but would like to buy one.
Philosophically, people should be free to peacefully and voluntarily exchange their labor and their property without interference by government. When government gets started in regulating trade, those with the most political power will get protection and everyone else will pay higher prices.